London Calling: TSMC next for New York fab?

Could TSMC be about to put down a wafer fab next to Globalfoundries' Fab 8 on the Luther Forest Technology Campus in Saratoga County, New York?

Evidence is starting to mount that foundry chip maker Taiwan Semiconductor Manufacturing Co. Ltd. could be about to follow Globalfoundries Inc. in building a wafer fab in up-state New York.

If negotiations play out it could be one of the first commercial-scale wafer fabs set down ready to manufacture on 450-mm diameter wafers whenever that transition should come. And it could be set down next door to Globalfoundries' Fab 8 in the Luther Forest Technology Campus in Saratoga County, one of the sites under consideration.

Reports have been circulating through November that a major semiconductor company has retained consulting firm Deloitte Touche Tohmatsu Ltd. to find a location for a 3.2 million square foot production facility.

Operating under the codename Project Azalea Deloitte has reportedly considered sites multiple sites in upstate New York as well as possibilities in California and Texas. The facility is expected to create about 1,000 jobs adding to the speculation that this is a multibillion dollar, leading-edge wafer fab, which restricts the list of possible companies. The location is expected to be selected before the end of 2012 and land negotiations concluded by the end of February 2013.

This has been put together with reports that U.S. congressman Bill Owens, representative for New York, visited TSMC in December 2011, which at the time prompted speculation that TSMC was considering building a wafer fab in the New York area.

Globalfoundries is already on the ground there; Intel already has multiple centers away from New York; Samsung has its U.S. manufacturing focus in Austin Texas, and so circumstantial evidence is starting to point to TSMC as the likely owner of Project Azalea.

And even though TSMC has always been a strong advocate of clustering its fabs together at campus sites in Taiwan, such a move would make sense because New York state has become a center of excellence for nanoelectronics, extreme ultraviolet lithography and is the global center for pioneering the technology around 450-mm diameter wafers. In additon, having a leading-edge manufacturing site in the United States would not hurt TSMC's efforts to take the manufacturing of processors for Apple away from rival Samsung.

As well as being the manufacturing location for IBM and Globalfoundries, New York hosts the College of Nanoscale Science and Engineering (CNSE) at the University of Albany. Perhaps more significantly the Global 450 Consortium (G450C) was established in 2011 at CNSE's Albany NanoTech Campus. G450C comprises the five leading chip companies with an interest in the next-generation wafer production; IBM, Intel, Globalfoundries, Samsung and TSMC.

There is a high degree of uncertainty about the introduction of 450-mm wafer production by TSMC or by any other semiconductor manufacturer with estimates varying from 2015 to 2018. That does, perhaps raise the possibility of consortium-owned 450-mm wafer fab being set down in New York, but in general the semiconductor industry finds it hard to work in this way in the competitive commercial world.

And it is interesting to note that in Chinese culture the Azalea is known as the "thinking-of-home" bush.

It is obvious where the fab is going to wind up: it will be stuck very tightly to whichever local government puts forth the biggest and juiciest taxpayer's-hard-earned-money-filled teats.
There was a wonderful article in the NYT a few weeks back about how local and state governments blow $80 billion a year poaching jobs from one another in this stupid, zero-sum manner. The solution is obviously a federal issue, so you can be sure nothing will get done because one party clearly has no incentive to stop this garbage.

Why not Apple?
Can Samsung keep up with production demands for Apple? Could GloFo keep up production demands? Is TSMC and Samsung providing the technology yields necessary to compete? So...highly doubtful Intel would go the NY fab route with the current investment in AZ and OR. What product is driving the industry that needs lower node size technology and higher production capability?

Advantages:
- They can poach talent from IBM and GE
- Foreign Investor tax break
- Whatever deals they make with New York State and the US government. RPI is close by too!
Disadvantages:
- New York State
- New York State
and most of all
- New York State

TSMC doesn't have any benefit having fab in NY. They don't develop technology in IBM camp, so they have to transfer technology from Taiwan, which is not efficient. In addition, Taiwan and China have more flexible and cheaper workforce. Apple asking is non-sense, as Apple and Samsung are simply one negotiation away from getting deal done. Too risky for TSMC to build a fab in NY just for one particular customer.. Maybe joint venture (i.e., different legal entity) with one of larger customers (Apple or Qualcomm) to build a dedicated fab in US may make more sense.

Besides the actual building cost, there is also the operating/maintaining cost. Samsung and TSMC already have US locations for comparison, why add a different US location? NY one-time subsidy doesn't make up for subsequent operation/resource costs of 10 nm fab, which are very location-dependent.

New York is actually a very good choice. There is excellent transportation, and facilities. A highly educated workforce (believe it or not), and a history of technology, with RIT being one of the most highly regarded institutions in the area. The U of Buffalo Is well respected in technology.
The fact that so many other high tech firms have located here is evidence of its compatibility.